Table of contents:
3) References
Issue: The client encountered the following error while testing the custom SMTP settings in the RH portal.
Issue description:
535 5.7.139 Authentication unsuccessful, basic authentication is disabled.
[SG3P274CA0002.SGPP274.PROD.OUTLOOK.COM 2026-03-31T09:09:34.230Z]
This is a Microsoft 365 error. Microsoft has permanently disabled Basic Authentication (username + password) for most protocols in Exchange Online, with SMTP AUTH blocked by default, to enhance security against password spray attacks. The fix requires enabling SMTP AUTH specifically for the sending mailbox via the Microsoft 365 Admin Center.
Follow these steps to fix the issue
Solution 1:
Enable SMTP AUTH for the mailbox in Microsoft 365
Go to https://admin.microsoft.com and log in as an Admin
Navigate to Users → Active Users
Search for and open the mailbox. For example: [email protected]
Click the Mail tab → Manage email apps
Check the box for Authenticated SMTP → Save
Wait 5–10 minutes, then click Test Settings on the portal
Note: Once the above step is completed, follow the next step to verify SMTP AUTH at the tenant level
Verify whether SMTP AUTH is enabled at the tenant level
Sometimes SMTP AUTH is disabled at the organization level, which overrides per-user settings. To check:
Open Exchange Admin Center → https://admin.exchange.microsoft.com
Go to Settings → Mail flow
Look for Turn off Authenticated SMTP - ensure this is unchecked (i.e., SMTP AUTH is allowed)
Alternatively, verify via PowerShell:
# Connect to Exchange Online
Connect-ExchangeOnline -UserPrincipalName [email protected]
# Check the mailbox SMTP AUTH setting
Get-CASMailbox -Identity [email protected] | Select SmtpClientAuthenticationDisabled
If the result is True → SMTP AUTH is blocked.
Then, run:
Set-CASMailbox -Identity [email protected] -SmtpClientAuthenticationDisabled $false
If the result is False → SMTP AUTH is already enabled at the mailbox level
Then check Tenant-Level SMTP AUTH via PowerShell
# Check organization-wide setting
Get-TransportConfig | Select SmtpClientAuthenticationDisabled
If True → Re-enable at org level:
Set-TransportConfig -SmtpClientAuthenticationDisabled $false
Solution 2:
Check if MFA (Multi-Factor Authentication) is enabled on the mailbox.
If it is, the regular password won't work, and you'll need an App Password instead.
Log in to My Sign-Ins as the mailbox user
Click + Add Method → App Password
Name it (e.g.,
Portal SMTP) and copy the generated passwordPaste that password into the portal's SMTP Password field and test again
Additional steps to check:
Disable Security Defaults in Entra ID
Microsoft's Security Defaults can block Basic Authentication entirely, overriding all other settings.
Go to Microsoft Azure and then Entra ID
Navigate to → Properties
Click Manage Security Defaults at the bottom
If enabled, turn it OFF and save
Check Conditional Access Policies
If the tenant uses Conditional Access, there may be a policy blocking Basic Auth.
In Microsoft Azure go to Entra ID → Security → Protect→ Conditional Access→ Policies
Look for any policy that blocks Exchange Online or SMTP
Either exclude the mailbox from that policy or adjust it to allow SMTP AUTH
References: